Orc Targets Derivative Execution
Traders of futures, options and swaps face a multitude of moving pieces, whether from developing regulation, advances in technology or shifting market dynamics.
Jeremie Bacon, Orc’s recently named president of the Americas, is focusing initially on revamping the client sales and service model for the technology provider’s listed derivatives platform. The same initiative is occurring in Orc’s Europe and Asia-Pacific regions.
“The sheer size and massive complexity of the software, that the user does not see, which takes so much to maintain,” is driving the need for change, Bacon said.
Enhancing its general support efforts, Orc is “becoming more proactive in managing client relationships by communicating more with them about best practices in configuring the layout and design they can put around Orc software,” whether for the third party or as part of Orc’s overall functionality, he said.
Clients will pay only for what they need as they’ll be tethered to the core linear structure, and fewer resources will be needed to continue enhancing and adding to this less centralized model, according to Bacon, who is based in Chicago.
This will allow Orc to manage its product roadmap from a global perspective, while it works with clients to create architecture that will provide new features and tools. However, it remains important to distinguish “what is theirs and what is ours,” he stated.
With connections to more than 150 trading venues spanning exchanges and market-data providers and a reputation for quick time to market with innovations, 26-year old Orc offers round-the-clock customer support to a few hundred proprietary and institutional trading entities, Bacon said. Its core customers are traders that use multiple strategies across asset classes and geographic regions.
Orc’s main competitors are developers that work in-house at trading and investing firms, Bacon said. Many firms of a certain size have a ‘secret sauce’ and their own execution systems themselves, but “that plays into our strategy,” Bacon said.
Telling customers what they are working on and what they will be writing, Orc professionals have been asking if partnering up can save the end user time or money. Clients “are embracing the fact that we are open as a platform vendor,” Bacon said.
The management of entitlements has emerged as the key client demand, Bacon told Markets Media. Orc is rapidly approaching delivery of a whole new entitlements framework — a series of permission structures with advanced system configuration for traders to analyze and control strategies, and monitor risk, he said.
Another critical priority in scope for clients is the need for pre-trade risk management protocols that are for each desktop but also across an entire group of traders feeding up to a master profit and loss (P&L) — what positions are held, where there is exposure, and implications for margins, Bacon said.
Optimizing what part of the data flow makes it to the screen for pre-trade analytics — infrastructure that is “smart enough and won’t slow down getting the pertinent stuff on the screen” — is the latency tie-in demanded by Orc customers on web browsers or a platform, Bacon said. User interface and window design that allows clients to make changes and access data are the most significant variables, Bacon noted.
Current overarching themes for listed derivatives markets include more consolidation, tighter restrictions and regulations, low volatility and the potential for customer attrition, Bacon stated.
Survivors in the next 15 years will be “the organizations that are medium- to long-term focused combining the best strategies, the best risk management and best portfolio management,” as well as those who can re-set the ship in evolving market conditions, he concluded.